Is delighting your customers such a good idea?

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If you believe what you read, the key to creating value in the “age of the customer” is more and better customer experiences: instant satisfaction, transparent pricing, customized offerings…all delivered at lightning speed. The Web is awash with content encouraging us to delight consumers, or be left behind.

And research shows we’re listening. Businesses are investing record amounts into customer experience (CX), without giving full consideration to whether exceeding expectation actually results in more business from their target consumer. Let’s be clear: the fundamentals haven’t changed. Failing to meet customers’ expectations will still negatively affect revenue and share. But delighting customers in one way, will not make up for failing them in another.

Yes, businesses should seek to continually meet customers’ expectations. However, rigorous thought must be given as to whether going above and beyond makes for a strategy that delivers value. Studies show that surpassing expectation can drive up costs far in excess of the value created, and even lead to diminishing returns as customers grow accustomed to improved experience. Organizations may not find a business case that justifies surpassing their customers’ expectations. In fact, many do not even attempt to fully examine the economics of the CX journey.

In analyzing your CX journey, avoid these common pitfalls:

Taking measures without the metrics to back them up: Businesses often base their CX investment plans on financial/customer measures with an unsubstantiated relationship to customer experience.

Estimating potential benefit inaccurately: Satisfaction surveys identify deficiencies, and may help estimate the potential upside of improved CX, but they seldom provide a complete picture. Time and again, businesses fail to understand or even consider the value of the customer to the company, or vice versa.

A lack of structure and/or support for delivery: Businesses can also be unwilling or unable to deliver the constant level of experience that their customers expect, nor figure out what it will cost.

With accurate projections of costs, benefit potential and delivery in place, your analysis can be fine-tuned by giving consideration to the limits of customer expectation. “Satisfier” experiences determine baseline expectations, and without these, customers will consider a company deficient and not worth doing business with. Meanwhile, “selectors” are the value-added services that make it easier for a customer to decide between two companies. As an additional consideration, in an industry with a lower switching barrier, there may be value in setting yourself apart from the pack. However, where greater barriers exist, or if you’re not a customer’s brand of choice, exceeding expectations will not likely have a positive impact on your bottom line.

The behavior of today’s empowered customer will continue to shift, along with their expectations. Companies must focus on proactively managing the CX, and not the customer. An optimized CX strategy belongs to those companies who understand and are guided by the economics of the customer journey.

Planning based on a thorough analysis is essential to shaping a fiscally responsible strategy, as once you change what your customers expect; it's hard to walk back.